Small BT pension 14 January at 3:05PM in Pensions, annuities & retirement planning 11 replies 458 views

Lily8

Hi everyone. Wondering if anyone could point out any potential pitfalls to what my cousin, now a resident in New Zealand is considering please?

She has been approached by a company in NZ about transferring a small defined benefit BT pension worth £13,531.36 on transfer.

I thought you couldn't get better than a DB pension? But I told her about this lovely board and that I would ask. I just want her to make an informed decision.

She is 54 and single if that's of relevance?

Thanks

Dazed_and_C0nfused

Peoples definitions of "small" vary.

How much annual pension would she be giving up for the £13k?

What is the companies fee?

Marcon

Lily8 said:

Hi everyone. Wondering if anyone could point out any potential pitfalls to what my cousin, now a resident in New Zealand is considering please?

She has been approached by a company in NZ about transferring a small defined benefit BT pension worth £13,531.36 on transfer.

I thought you couldn't get better than a DB pension? But I told her about this lovely board and that I would ask. I just want her to make an informed decision.

She is 54 and single if that's of relevance?

Thanks

1. If she was cold called (and it sounds as if she was), check very carefully whether she is being approached by scammers
2. she'll lose the guarantee payments associated with having a DB pension
3. she'll be paying transfer-related fees to the company which approached her
4. she'll doubtless be encouraged to pay fees to the company to 'look after' her investments

Why does she want to do it at all? There are very limited circumstances where it might be a reasonable idea - but the word 'limited' is key here.

Lily8

Thanks Dazed_and C0nfused £296.54pa ( she was only there a few years) I will ask  her what the companies fee is.

xylophone

https://www.gov.uk/guidance/check-the-recognised-overseas-pension-schemes-notification-list#countries-m-to-r

The general information here might be worth a look.

https://www.new-zealand-immigration.com/blogs/uk-pension-transfers

Lily8

Marcon, thank you so much for the response. That's exactly the information she was looking for.  I will send your reply to her and I think she will leave it with BT. I was concerned it might be a scam. The reason she gave is they told her it would be wise to get any investments she has in the UK out due to our current economy. Can't thank you enough. It is a lot of money to her.

Dazed_and_C0nfused

Lily8 said:

Marcon, thank you so much for the response. That's exactly the information she was looking for.  I will send your reply to her and I think she will leave it with BT. I was concerned it might be a scam. The reason she gave is they told her it would be wise to get any investments she has in the UK out due to our current economy. Can't thank you enough. It is a lot of money to her.

What impact does the current UK economy have on an already accrued Defined Benefit pension though?

Albermarle

The reason she gave is they told her it would be wise to get any investments she has in the UK out due to our current economy.
Two points here.
A DB pension ( like this one) are not normally affected by how investments are performing.
In any case investments in the UK are not necessarily directly affected by the current economic issues.

Lily8

 Albermarle and Dazed_and_C0nfused I'm just glad she told me what she was considering as it rang alarm bells for me. Appreciate your responses. Thank you

Lily8

xylophone said:

https://www.gov.uk/guidance/check-the-recognised-overseas-pension-schemes-notification-list#countries-m-to-r

The general information here might be worth a look.

https://www.new-zealand-immigration.com/blogs/uk-pension-transfers

Thanks xylophone I will  have a read and send her the link too

tigerspill

The BT DB pension (all sections) are excellent - better than most.  I would be surprised that you could do better.  If it was a cold call, I would run a mile.